Complacency is Canada’s biggest enemy

Fen Osler Hampson is the Chancellor’s Professor and Director of The Norman Paterson School of International Affairs at Carleton University, and is the author of nine books and editor/co-editor of more than 25 other volumes on international affairs and Canadian foreign policy.

As the world swirls in the Eurozone crisis and the prospect that we may be sucked into another global financial crisis and recession, Canada’s own economic fortunes appear rosier than most. In an anemic crowd, we have the best growth rates in the G7. Yes, we are running deficits, but our overall public debt is not nearly as bad as many of our G7 and OECD compatriots.

Most importantly, our political system is not completely dysfunctional. Unlike the US and Europe, which are locked in endless political stalemate and gridlock, our leaders can take tough decisions if need be. Our Westminster system of government, which concentrates powers in the executive, can act in time of crisis.

Canadians have many good reasons to feel good about themselves. Complacency, however, is our biggest enemy.

The Canada We Want in 2020, a report released late last week by Canada 2020, a self-described “non-partisan, progressive centre working to create an environment of social and economic prosperity for Canada and all Canadians,” is a must-read for our political elites and indeed all Canadians. It describes a Canada that is skating on extremely thin ice and in real danger of falling through unless we act fast to fix some critical problems in our economy, policy, and geostrategic orientation.

The essays in the study, written by some of Canada’s leading former public servants, business leaders, and policy analysts, cover a wide canvass — the challenges of innovation and productivity, how Canada must rise to meet the Asia challenge, reducing carbon emissions, income inequality, and what must be done to fix our flagging health care system.

The message throughout is clear: these issues are interrelated and fixing them will require aggressive strategic leadership by Ottawa.

A lack of innovation and declining productivity relative to other countries are the chief bugbears of the Canadian economy according to Kevin Lynch, one of the report’s key authors. Since the 1990s, the federal government has made enormous investments to strengthen university-based research through instruments like the Canada Foundation for Innovation. It has also cut personal income and corporate taxes. Notwithstanding these efforts, our overall productivity performance continues to decline.

Lynch argues that we essentially need more of the same — more targeted investment in research and education to foster innovation and changes in our regulatory systems to increase market competition, particularly in those protected economic sectors where innovation and productivity gaps are the widest.

In pointing to the rapid shift in global economic and financial power to Asia, the report — like many others in whose wake it follows — argues that Canada has been on the “slow” not the “fast boat” to Asia. We need to up our game by deepening trade, investment, and economic relationships with Asian countries.

According to Yuen Pau Woo, who heads the Asia-Pacific Foundation, a “leap frog” strategy of engagement would use the city of Vancouver as a pivot for deeper engagement with the region, perhaps by relocating those federal departments and agencies that deal with the Asia-Pacific to Vancouver. This recommendation may strike some as a thinly disguised pitch for a regional development strategy of yesteryear. In fact, the problem today is one of “mainstreaming” the Asia-Pacific in the attitudes and geostrategic outlook of all Canadians — not simply leaving it to Vancouver, where the region’s presence is already keenly felt, to carry the freight.

The essays by Mark Cameron and Andrew Sharpe identify a “creeping” problem that should be of concern to all Canadians — rising levels of income inequality and a growing concentration of much of nation’s wealth in the hands of a few. This is a problem common to all western democracies, but no less consequential for the future health and fabric of our own polity.

The report also offers critical analysis on the challenges of securing viable healthcare delivery and financing, and “squaring the carbon cycle” in a country that, on a per capita basis, has the highest greenhouse gas emissions in the world.

Notwithstanding its superb analysis and chockfull valise of ideas and policy prescriptions, The Canada We Want in 2020 ignores the elephant in the room. It says little about the many challenges we continue to face with our most important trading and investment partner, the United States. Whether we like it or not, the behemoth south of our border will continue to be the platform for our engagement with the rest of the world and the Canada we want.